Dahn Corporation has provided the following financial data:

Dividends on common stock during Year 2 totaled $1,600. The market price of common stock at the end of Year 2 was $2.37 per share.
-The company's average collection period (age of receivables) for Year 2 is closest to:
A)35.7 days
B)1.1 days
C)1.0 days
D)35.2 days

Question

Dahn Corporation has provided the following financial data:

Dividends on common stock during Year 2 totaled $1,600. The market price of common stock at the end of Year 2 was $2.37 per share.
-The company's average collection period (age of receivables) for Year 2 is closest to:
A)35.7 days 
B)1.1 days 
C)1.0 days 
D)35.2 days

Quizplus · Accepted Answer

Average Collection Period = (Accounts Receivable / Credit Sales) * Number of Days 
= ($360,000 / $10,800,000) * 365 
= 12.083 days per year 
= 35.2 days

Dahn Corporation Has Provided the Following Financial Data